Pa. gas prices rise, while other states see decline

HARRISBURG - Motorists across Pennsylvania are feeling the gas tax pinch already, paying a few more pennies at the pump this year compared with drivers in neighboring states, according to a new survey by AAA Mid-Atlantic.

The group attributes the higher gas prices to a provision in the new transportation funding act that increased the wholesale gas tax that retailers then imposed on consumers.

The sweeping transportation bill, approved late last year, lifted the cap on the oil franchise tax as one of the ways to raise $2.3 billion to address highway and transit infrastructure needs.

The new AAA survey found in the first two weeks of the year that gas prices went up an average of four cents per gallon in Pennsylvania, while surrounding states experienced declines by as much as five cents in Delaware and three cents in New Jersey.

"It looks like it correlates," said Jenny Robinson, spokeswoman for AAA Mid-Atlantic, which supported the transportation bill. "Gas prices in Pennsylvania went up in the first few days of the year, and they didn't go up in other states."

As of Jan. 1, wholesale gas taxes were increased by 9.5 cents per gallon under the first phase of changes to the oil franchise tax.

Per-gallon prices are projected to increase by as much 25 cents as the phase-in occurs over four years.

Jim Runk, president of the Pennsylvania Motor Truck Association, which represents 1,300 trucking companies, said it is too early to tell if the increase is connected to the gas tax.

The five-county Philadelphia area gas average stood at $3.55 Monday, down three cents in the last week, according to AAA.

On Tuesday, the price of U.S. oil was up nearly 1 percent, according to industry reports.

Robinson acknowledged that no one wants to pay more for gasoline but said there is a cost to doing nothing.

"This improves safety and everyone's commute," she said. "We also hope market factors will offset some of those costs of wholesale taxes."

She said AAA was pleased to see the increase was small and did not leap to the full amount projected, as some had thought it would.

Critics of the bill said it was no surprise that retailers would pass the cost on to consumers.

"I think that what's happening is exactly what we predicted would happen. We are seeing a gas tax," said Rep. Daryl Metcalfe, a Republican, who noticed that prices jumped 10 cents a gallon in his Butler County district between New Year's Eve and Jan. 1.

"Consumers will have to absorb the cost and will not be recognizing the benefit of gas prices going down," said Metcalfe, who is a cosponsor of a bill to repeal the transportation act.

Increases in vehicle registration and driver's license fees - also part of the transportation funding act - go into effect in 2015.

By 2017, with the transportation plan fully in place, it is estimated the additional costs and fees together will amount to about $2.50 a week for every Pennsylvania motorist.